Assuming a Current Ratio of 1

question 109

Multiple Choice

Assuming a current ratio of 1.0 and an acid-test ratio of 0.80,how will the borrowing of cash by issuing a six-month note payable affect each ratio?

• A)Increase the current ratio and increase the acid-test ratio.
• B)No change to the current ratio and increase the acid-test ratio.
• C)Decrease the current ratio and decrease the acid-test ratio.
• D)Decrease the current ratio and increase the acid-test ratio.

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Definitions:

Eye Contact

The act of looking directly into another person's eyes, which can communicate attention, interest, or confidence.

Body Positioning

The arrangement and alignment of an individual's body, especially in relation to tasks, activities, or to convey non-verbal signals.

Proxemics

The study of human use of space within the context of communication, examining how physical distance between individuals affects relationships and interaction.

Nonverbal Communication

The process of conveying information or expressing feelings without the use of spoken words, through body language, facial expressions, and gestures.